Arsenal's rise in turnover allowed Ozil signing
Arsenal have reported a rise in turnover and say their new commercial muscle was a significant factor in the signing of Mesut Ozil for a club record £42.5million fee.
Despite reduced profits due to a drop in income from player sales and an increase in players' wages, Arsenal saw overall turnover rise to £242.8m in the year ending May 31 2013 from £235.3m the previous year.
Commercial and retail revenue rose 20% to £62m, boosted by the new sponsorship deal with Emirates airline.
That may still be dwarfed by Manchester United's record commercial income of £153m, but Arsenal chief executive Ivan Gazidis said the club's strong financial position meant it was now a major player on the world stage in terms of signing world-class players.
Gazidis said in the annual accounts: "The signing of Ozil for a club record fee is a significant step for us.
"This signing was a direct result of all the hard work we have put in over recent years to build the commercial capability of the club to deliver the consistent revenues and financial strength required to compete for the world's best players.
"That said, we will continue to stand by our principles in terms of nurturing young talent. That has been very evident with our extensions to the contracts of key young players over the last year and the emergence of teenagers Serge Gnabry and Gedion Zelalem into the first team squad.
"This is a key component of what we stand for at Arsenal Football Club and that will continue to be the case."
Group profits before tax dropped to £6.7m from £36.6m the previous year due salary increases and less income from player sales.
Wages were up to £155m from £143m as Arsenal maintained pace with the highest payers in the Premier League: Manchester City £202m (2012), Manchester United £181m (2013), Chelsea £176m (2012), Liverpool £131m (2012) and Tottenham £90m (2012).
Last season, the Gunners made a profit on sale of player registrations of £47m, £18m less than the year before, mainly due to the sales of Robin van Persie to United and Alex Song to Barcelona. Ozil's transfer fee is not included in the latest accounts.
Arsenal still have the highest cash reserves of any club in the Premier League, totalling £119.7m - with a further £35m held back as debt service reserves - while United has the next highest at £94m.
Arsenal chairman Sir Chips Keswick added: "We must continue to grow commercially to provide the club with the best opportunity to achieve success and we must do this in a way which remains true to our values and which ensures and protects the long-term sustainability of the club.
"We face a competitive landscape across the top of the Premier League and across Europe's elite clubs which is tougher than ever. Despite fair play initiatives the financial competition for top players remains intense and transfer prices and player wages continue to move ever higher.
"It is therefore positive that the strong financial platform we have created in recent years allows us to continue to be competitive at the highest level."